In most major countries,including Japan,Canada,and the US,fluctuations in consumption are
A) countercyclical and more volatile than GDP
B) countercyclical and less volatile than GDP
C) procyclical and more volatile than GDP
D) procyclical and less volatile than GDP
E) unrelated to fluctuations in GDP

Question

Quizplus · Accepted Answer

In most major countries, consumption tends to move in the same direction as GDP, making it procyclical. However, consumption is generally less volatile than GDP because individuals and families tend to smooth their consumption over time, adjusting their savings and borrowing rather than their spending in response to changes in income.

In Most Major Countries,including Japan,Canada,and the US,fluctuations in Consumption Are